Match List I with List II
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List - I |
List – II |
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|
(A) |
Average Propensity to Consume |
(I) |
Ratio of Change in Consumption and change in Income |
|
(B) |
Average Propensity to Save |
(II) |
Ratio of change in Saving and change in Income |
|
(C) |
Marginal Propensity to Consume |
(III) |
Ratio of Saving and Income |
|
(D) |
Marginal Propensity to Save |
(IV) |
Ratio of Consumption and Income |
Choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 3
|
List - I |
List – II |
||
|
(A) |
Average Propensity to Consume |
(I) |
Ratio of Consumption and Income |
|
(B) |
Average Propensity to Save |
(II) |
Ratio of Saving and Income |
|
(C) |
Marginal Propensity to Consume |
(III) |
Ratio of Change in Consumption and change in Income |
|
(D) |
Marginal Propensity to Save |
(IV) |
Ratio of change in Saving and change in Income |
Marginal propensity to consume (MPC): it is the change in consumption per unit change in income. It is denoted by c and is equal to ∆C/ ∆Y .
Marginal propensity to save (MPS): it is the change in savings per unit change in income. It is denoted by s and is equal to 1− c . It implies that s+c =1 .
Average propensity to consume (APC): it is the consumption per unit of income i.e., C/Y .
Average propensity to save (APS): it is the savings per unit of income i.e., S/Y .